Related Features

Recession-Proof Strategies

At a seminar developed by the Fragrance Foundation, industry experts explain how fragrance companies can succeed despite a global recession.

By Nancy Jeffries
Correspondent

Economic downturns present new challenges in the marketplace, but industry experts are finding ways to sell fragrance even in the most trying times. Mary Ellen Lapsansky, vice president of The Fragrance Foundation, introduced a panel that discussed strategies for selling scents in an economic downturn, on Feb. 17, 2009, at New York City’s Time-Life Building. Panelists included: Arnold Brown, chairman, Weiner, Edrich, Brown, Inc., a strategic planning and change management consultant; Candace Corlett, president, WSL Strategic Retail, the firm that publishes How America Shops; Dr. Robert K. Passikoff, founder and president of Brand Keys, Inc., and author of Predicting Marketing Success, and moderator, Mary Manning, founder of Manning Associates, who has 20 years experience in strategic marketing and brand development at Coty. The session, Survival of the Most Strategic: Marketing in a Downturn—Strategies for Selling Scents in Challenging Times, focused on implementing new strategies in the fragrance industry in the face of a global recession. Ms. Manning set the stage by recalling previous recessions, when bursts of creativity fused with nostalgia to create brands that resonated with consumers. In 1982, during the Reagan Administration, Coty launched Stetson, which captured the nostalgia of America’s past during difficult times. Later, Vanilla Fields, which launched in 1987 following the stock market crash, reminded “cocooning” consumers of simpler times, via the comforting scent of vanilla. Post 9/11, when the economy dipped again, Coty’s Adidas brand, which harkened back to the 1950s, renewed a nostalgic fondness for the track and field brand.

Each example suggests that the middle class consumer’s dollar could be leveraged with emotional connections at particular times in history. Whether the Old West or the comfort of Vanilla Fields, Ms. Manning’s hypothesis suggests that a strong emotional connection is integral to a brand’s success.

Middle Class Anxiety

Mr. Brown said economic downturns evoke anxiety among the middle class, in particular for those individuals who fear they will lose the kinds of jobs that enable them to feel they are part of the middle class. In addition, there is fear of outsourcing jobs.

“What we’re seeing is ‘brain work’ being performed by automatic programs, resulting in fears that more people will lose their jobs,” he said.

“When it comes to fragrance, this is part of what many people see as integral to their position. They are reassuring themselves that their fragrance use is part of their middle class identity,” Mr. Brown noted. “Consumers are cutting back on more expensive procedures, such as Botox, and substituting them. They seek a valid, moral and useful justification for their expenditures now,” he said, adding that wellness is a concept that not only encompasses being healthy, but feeling good about yourself. Citing aromatherapy, he added, “It’s important to focus on how fragrance contributes to wellness.”

“Building the customer may become more important than building the brand,” he noted, saying customer engagement allows the relationship to build the brand. Closing with the reassurance that two billion plus people will be entering the middle class around the world, he said that when the economy stabilizes, consumers will be ready to consider products, particularly those fragrances that address wellness, which will allow “the future of fragrance to smell very good indeed.”

Shopping Life Crises

In her opening remarks, Ms. Corlett said, “My mission today is to help bring home the reality we are dealing with and offer some bright, creative spots that are often spurred in crises.”

In an internet study of 1,500 people, Ms. Corlett found, “We do not have a happy shopper out there. Whether it’s global recession, corporate scandals or wars, we are dealing with a consumer who has been battered.”

In her findings, she noted 64% are cutting spending because they do not know what will happen next, and 75% don’t want to shop for anything they don’t really need. Trading down, avoiding malls and department stores, and cutting back on products and services are the Modus operandi across the board. She cited a return to the “June Cleaver era,” when more families cooked meals at home, and expenditures on clothing, fragrance, and salon services were cut. The big culture shift, including the record numbers with which consumers are flocking to the internet for purchases, further supports the need to create products that are able to tap into the values being formed by customers.

The Ann Taylor Loft-Tide partnership, drives home the point that theclothing is washable; while Juicy Couture’s in-store hand massages, are incentives that are bold, noticeable and relevant, she explained.

“Be the solution and understand your customer. Feel her pain and share her values, and keep them integral to your brands,” she concluded.

Engage the Consumer

Dr. Passikoff focused on building sustainable brands, which cannot be done in the absence of emotional connection. While creative packaging, visual metaphors and celebrity fragrances have all been important in terms of emotional connection, the reliance on borrowed equity is diminishing.

“The brand must stand for something in the minds of the consumer. What’s missing is engagement, how to reach out and touch the consumer,” he added. Providing statistical support for the fusing of the emotional with the rational, Dr. Passikoff made a strong case for the right balance to provide an increased propensity to buy.

Citing a system of engagement metrics, he noted the importance of understanding the value of media engagement as it impacts retail results, and insisted that combinations of experiential promotion, advertising, magazines, word of mouth and the internet, “support a strong correlation between the communication of a brand’s equity and actual purchases in the marketplace. “Ultimately, marketers can fuse the emotional and the rational to obtain the strongest engagement,” he said.

While no one ventured a date for the return of economic stabilization, Ms. Manning concluded, “With true brand engagement, perhaps we can get back to brand building and strong customer loyalty again.”